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THE UNITED REPUBLIC OF TANZANIA

THE UNITED REPUBLIC OF TANZANIA. RURAL ENERGY AGENCY (REA). WORKSHOP ON ENERGY AND ENVIRONMENT PARTNERSHIP IN SOUTHERN AFRICA GABORONE SUN HOTEL BOTSWANA – 19 TH - 20 TH JAN. 2009 “OPPORTUNITIES FOR INVESTMENTs AND PARTNERSHIPS IN THE RURAL ENERGY SECTOR IN TANZANIA” PRESENTED BY:

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THE UNITED REPUBLIC OF TANZANIA

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  1. THE UNITED REPUBLIC OF TANZANIA RURAL ENERGY AGENCY (REA) WORKSHOP ON ENERGY AND ENVIRONMENT PARTNERSHIP IN SOUTHERN AFRICA GABORONE SUN HOTEL BOTSWANA – 19TH - 20TH JAN. 2009 “OPPORTUNITIES FOR INVESTMENTs AND PARTNERSHIPS IN THE RURAL ENERGY SECTOR IN TANZANIA” PRESENTED BY: ENG. BENGIEL HUMPHREY MSOFE(DIRECTOR OF TECHNICAL SERVICES).

  2. Outline of Presentation • About Tanzania • Rural Energy Agency • Roles and Functions of the Agency • Sources of Funds • Projects under Implementation • Prospective Projects • Opportunities in the Rural Energy Sector • Contact Information.

  3. 1. About Tanzania • Location: East Africa - Longitude 29o - 41o East, Latitude 1o - 12o South • Borders: • Uganda and Kenya (North) • Mozambique and Malawi (South) • Indian Ocean (East) • DRC Congo, Burundi, Rwanda, Zambia (West) • Capitals: Dodoma (Political), Dar es Salaam (Commercial); • Land Area Total: 945,000 km2,Inland Water Area: 59,050km2; • Population (2008): estimated at 37 million people, 10% of this population have access to electricity; • 75% of the population live in rural areas; • only 2% of the rural population have access to electricity; • Biomass makes 90% of the national energy balance; • Agriculture is the major economic activity providing 85% of all exports, employing 80% of the workforce, and accounting for 45% of the national GDP.

  4. 2. Rural Energy Agency (REA) • It is an autonomous body established under the Rural Energy Act No. 8 of 2005; • It is governed by a Representative Board of Directors (The Rural Energy Board - REB) with members appointed from key sector ministries and institutions; • The Act also establishes the Rural Energy Fund (REF) responsible for grant payments and financial disbursements through a Trust Agent; • The Ministry of Energy and Minerals oversees the activities of REA.

  5. 3. Roles and Functions of the Agency • Promote, facilitate, and improve modern energy access for social and productive use in rural areas; • Promotion of rational and efficient production and use of energy; • Utilization of the Rural Energy Fund to provide grant and subsidy financing to eligible rural energy projects and; • Facilitating activities of key stakeholders with interest in rural energy.

  6. 4. Sources of Funds The Act provides for REF to get funds from the following sources: • Government annual budgetary allocations; • Contribution from International financial organizations, multilateral and bilateral agencies and other development partners; • Levies of up to 5% on the commercial generations of electricity from the national grid; • Levies of up to 5% on the generation of electricity in specified isolated systems; • Fees in respect of programs, publications, seminars, consultancy, and other services provided by the agency; and • Interest on investment.

  7. 5. Projects under implementation REA has so far supported TEN projects through the Rural Energy Fund (REF) • Grid extension to un-electrified commercial centers and district headquarters of Kilolo, Uyui, Kilindi, Mkinga, Bahi, MtowaMbu, Matema Beach, Chief Oswald Mang’ombe, the Songosongo Way Leave Village Electrification Scheme (WVES), and NgageB in Simanjiro District; • Above projects are being implemented by TANESCO as the project developer; • Total value of the support is US$ 9m/= of which US$6.1m/= has already been disbursed.

  8. 6. Prospective Projects • On-Grid Projects (Grid extension) • Off-Grid Projects • TEDAP Project • Solar PV Project for Schools and Health Facilities

  9. 6.1. On-Grid Projects (Grid Extension) 1. On-Grid Projects (Grid extension) • REA is collaborating with the electricity utility company in Tanzania (TANESCO) to implement 32 grid extension projects to economically active rural commercial centers for the financial year 2008/09; • TANESCO has conducted surveys in the 32 prospective project areas, the implementation cost is estimated at US$ 65m/=; • Projected cost for grid extension to such rural commercially active centers for 2009/10 financial year is estimated at US$ 100m/=

  10. 6.2. Off-Grids Projects Seventeen off-grid projects are being pursued with various developers; • 13 Small Hydro Power Projects • 2 Biomass Cogeneration Projects (TPCL & Sao Hill) • 2 Biomass Gasification Projects (Mafia & Mkonge Energy) • These projects are at various stages of implementation; • Total expected capacity to be generated is 46.2 MW; • Total new connections expected is 8,400; • Total expected cost for all the 17 projects is US$ 118.9m/=; • Opportunities for investment support and partnerships are invited.

  11. 6.3. TEDAP Project Tanzania Energy Development and Access Expansion Project (TEDAP) • The project is implemented by Ministry of Energy and Minerals in collaboration with TANESCO and REA; • Funded by World Bank and GEF and running from April 2008 to June 2012; • Aims at increasing the electricity access in rural and peri-urban Tanzania; • Support facilities to project developers under TEDAP: • Performance grants – US$ 500 for each new connection in rural areas using renewable energy sources • Matching Grants –technical assistance and capacity building • The Sustainable Solar Market Packages (SSMP) project piloted in Sumbawanga District in Tanzania – providing power solutions for rural public institutions, business establishments, households, etc..

  12. 6.4. Solar PV Project for Schools and Health Facilities Prospective Solar PV Project for Schools and Health Facilities • Planned for implementation in FIVE districts of Kigoma Rural, Kasulu, Kibondo (Kigoma Region) and Tunduru and Namtumbo (Ruvuma Region); • Targets installation of centralized and decentralized solar PV systems for secondary schools, health facilities, and households; • Aims at improving educational and health facilities in rural areas; • A total of 173 rural facilities (78 secondary schools, 67 dispensaries, 26 health centers, and 2 Hospitals) will be covered; • Total cost estimated at US$ 18m/=, including a training package for technicians & sales agents, maintenance contracts, transport, etc to sustain the facilities; • REA is still looking for partners and funds to facilitate the implementation of this project.

  13. 7. Opportunities in the Rural Energy Sector • Capacity building and training support from REA to enable project developers undertake rural energy projects; • Grants and subsidies provided by REA to support rural energy projects; • Business diversification to rural power generation and distribution industry; • An opportunity for investors to expand their market reach in to rural areas; • Investor’s contribution to the growth of the rural energy industry in Tanzania. • “Low income rural households are a genuine commercial market segment “

  14. 8. Contact Information: Director General Rural Energy Agency (REA) 114 Malik Road, Upanga P. O. Box 7990 Dar es Salaam, Tanzania Tel: +255 22 2134006 Fax: +255 22 2134007 e-mail: info@rea.go.tz Website: www.rea.go.tz

  15. THANK YOU

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